Concourt scraps Procurement Act over four-hour comment window

The Public Procurement Act has been struck from the statute book, four years after it was signed and without a single tender ever being run under it. The Constitutional Court declared the Act unconstitutional on Thursday because Parliament did not give the public a fair chance to be heard before passing it.

Acting Justice Lister Nuku handed down the unanimous judgment. The Act, signed into law in July 2024, was meant to replace 34 separate pieces of procurement legislation with a single framework governing how the state buys goods and services. It never came into force.

As Cape Town ETC reported on 18 September, the court found that Parliament failed in its constitutional duty to facilitate meaningful public participation. The ruling was delivered by Acting Justice Nuku.

Four hours, then two minutes each

The evidence that decided the case came from the Standing Committee’s own process. When the Bill returned to the committee, the public was given four hours to assess changes that included a completely rewritten Chapter Four. Stakeholders were then given two minutes each to present their cases.

Given the importance of the Bill and the extent of the amendments, Acting Justice Nuku said, that did not strike him as reasonable. It would have affected stakeholders’ ability to engage with the Bill and to raise their concerns.

National Treasury conceded that of 112 submissions received, it considered only about 40 because of time constraints. The court called that a serious deficiency, one that prevented the public’s views from reaching the lawmakers.

The court also noted that no reason was given for the haste. The record suggested one reason Parliament may have acted carelessly was to pass the Bill before the 2024 national elections.

What Chapter Four changed

The old Chapter Four was permissive, an enabling framework. The new one was prescriptive, with mandatory qualification criteria on which bidders could be routinely excluded as a matter of law.

Respondents, including the Speaker of the National Assembly, the chairperson of the National Council of Provinces and the Minister of Finance, argued that the new chapter’s content was foreshadowed in the old one and that the 2017 regulations under the Preferential Procurement Policy Framework Act contained the same concepts after extensive consultation.

The court found those arguments untenable. The new chapter introduced new mechanisms and categories, raising complex constitutional, economic and practical questions about competitiveness, fairness and cost effectiveness, material enough to warrant additional public participation. The 2017 regulations had themselves been declared unlawful and were replaced in 2022.

Who brought the case, and why

The applicants were amaBhungane, the Premier of the Western Cape Government, the City of Cape Town and the trade union Solidarity. They challenged the Act mainly on the lack of meaningful public participation during drafting and adoption. The City of Cape Town was concerned the new rules would hamper municipalities’ ability to act swiftly on urgent water, sanitation, electrical, waste and environmental issues. The applicants more broadly were concerned the Act would create red tape.

The court awarded costs to the applicants.

What it means for the money

The Act was designed to govern how billions of rands of public money are spent every year on service delivery. With it gone, the fragmented regime it was meant to consolidate remains in place.

For an ordinary reader, the practical effect is that the rules governing state tenders have not changed. The procurement system that existed before July 2024 is still the system that applies. The 34 pieces of legislation the Act was meant to replace still stand, and so do the 2022 preferential procurement regulations.

The judgment does not say the state cannot reform procurement. It says Parliament must do so through a process in which the public can genuinely take part. Acting Justice Nuku put the standard plainly: interested parties must be afforded a reasonable opportunity to know about the Bill and its issues, and to have an adequate say capable of influencing a decision.

That is the step now open to Parliament. A new Bill, properly consulted on, would face the same substantive questions about red tape, municipal urgency and bidder qualification that the applicants raised. The court has not answered those questions. It has said they must be answered in public.

Source: Cape Town ETC, Procurement Act struck down by Concourt.